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Gov. Tim Pawlenty talks to reporters outside his official residence Tuesday, saying he plans to roll out a series of state government reform measures in the coming weeks. He had just completed meeting with Democratic legislative leaders.

ST. PAUL -- Republican Gov. Tim Pawlenty and leaders of the Democratic-dominated Minnesota Legislature got a head start on their 2010 work Tuesday, agreeing they would start work on issues such as public works projects and how to inject money into the economy.

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Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said that legislative leaders extended a hand of "friendship is a little strong, but hand of cooperation."

The governor and legislative leaders emerged after a nearly 90-minute meeting with no firm announcements, but optimism that legislative committee chairmen and Pawlenty's commissioners will work together in the months leading to the Feb. 4 legislative session opening.

Much of the discussion was about health care. Both sides said they discussed how to fund health needs for more than 30,000 poor adults who soon will lose free health care coverage.

Pawlenty said he will not reinstate the General Assistance Medical Care program, but would consider ways to help those who lost funding when he made unilateral budget cuts in June.

Democrats want to take action beyond restoring medical care assistance in response to Pawlenty's June budget cuts. The governor made no promises other than to work with legislative Democrats.

The two sides emerged from talks at the governor's official home, mostly avoiding criticizing each other. When Pogemiller was asked whether Pawlenty appeared distracted by his apparent presidential aspirations, the senator replied: "It was a nice breakfast."

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, told Pawlenty that she does not like his idea to allow Minnesotans to buy health insurance from other states. She was especially concerned about buying from states that have inferior insurance policies.

However, the governor said Democrats must misunderstand his proposal, which would limit Minnesotans' purchases to the 20 states that provide the best insurance.

The two sides agreed, in principle at least, to back tax credits for business expansion. However, Kelliher said, that is a long-term economic aid that may not help the current budget.

Pawlenty went further than Democrats, calling for law changes to ease burdens the state places on businesses. That, he said, would lead to job creation.

Democrats often talk about fixing state 2011-12 budget problems sooner rather than later. But Pogemiller said the state's next budget cannot be fixed in 2010.

Pawlenty had a simple solution: "If you could control spending, you could control the deficit."

It is too early to know how big a deficit lawmakers and the governor will face in the two-year budget set to begin July 1, 2011, but finance experts say it likely will be several billion dollars.

Pawlenty hinted that he wants a public works bill, which funds state facilities' repairs and construction, to remain under $700 million. Democrats often call for a bill in the $1 billion range, saying more money spent means more jobs created.

The governor said an economic report due on Dec. 2 will help determine how much money he can support borrowing for public works projects. That report also could show a need to fix the current two-year budget, Pawlenty added.

Overall, the 2010 session will be more than just making minor changes, the governor said.